Financial irregularities prompt shakeups at Beard Foundation

Carol Emert, Chronicle Staff Writer

Published 4:00 am, Wednesday, September 15, 2004

A shakeup at New York's James Beard Foundation is reverberating in professional kitchens across the Bay Area.

The president of the foundation, a nonprofit that promotes the American culinary arts, resigned last week, while its board of trustees announced new leadership and a restructuring. Several journalists who volunteered on the restaurant awards committee have resigned over the controversy.

The changes follow an internal investigation that found the foundation lacked adequate financial controls and that expenditures of hundreds of thousands of dollars had not been properly documented. The New York attorney general is looking into the matter.

Latest food videos

Last week's changes are designed to institute more professional management at the $4.7 million organization, which had been run by a volunteer president since its founding in 1986.

Problems at the foundation came to light in recent press reports, including a Sept. 6 article in the New York Times.

The Times questioned the organization's expenditure of $1 million on its annual awards gala and its policy of making visiting chefs bear most of the food and travel costs for the prestigious, 100-person "chef dinners" held almost nightly at the James Beard House in Greenwich Village.

Chez Panisse founder and four-time Beard winner Alice Waters, who was friends with the late James Beard, a writer and cooking teacher considered the dean of American food, says she hopes the foundation's problems will "not taint the image of the awards themselves."

Northern California restaurants, chefs, cookbook authors and journalists earn a significant share of Beard awards, which can catapult the recipient from local favorite to national stand-out.

Ten of the 66 awards given out last May landed in the Bay Area, including five of 22 restaurant and chef honors. Only New York ranked higher, with six restaurant awards. The Chronicle received three awards, including best section for the combined Food and Wine sections. (Disclosure: This reporter is a Wine section staff member.)

Awards help careers

Receiving a Beard award "puts a chef in a different category," says Andrew Freeman, vice president for public relations at Kimpton Hotels & Restaurants in San Francisco, which once managed Masa's.

While it's impossible to quantify the economic impact, Beard recognition brings both loyal locals and out-of-town diners into a restaurant, Freeman says.

The awards are managed independently from the foundation by a nonstaff manager and five volunteer boards of food professionals. Funding comes from the foundation and, with the exception of the journalism awards, from corporate sponsors. None of the awards have cash value.

Some people aligned with the foundation are taking a hard look at their involvement. George Sape, a trustee who was named chairman last week, says he has received worried calls from corporate sponsors, which provide much of the foundation's funding, although none have pulled out.

"I would have preferred to go to the committee meeting this Friday and listen to what the trustees had to say," says Shaw, a food and media columnist. "But I can understand the editors' feelings. It's certainly clear that there are troubling questions, and that at the very least there had been extremely sloppy bookkeeping and poor management" at the foundation.

Committee member Ruth Reichl, the editor in chief of Gourmet magazine, says, "Nothing is proven, and I wouldn't presume to know the right or wrong." Still, she has resigned from the same committee because of reports that it was not giving away enough money, though that hasn't been proven.

Chronicle Executive Food and Wine Editor Michael Bauer, a restaurant award committee member, says he is "taking a wait-and-see attitude" until the issue can be discussed at this Friday's committee meeting.

He notes that the committees "run the award process without interference from the foundation." None of the recent allegations "have implicated (the awards) as mismanaged or suspect," he says.

The foundation was launched in 1986, a year after Beard's death, when Julia Child and others banded together to preserve his home. The awards premiered in 1991 and over the years the foundation has grown into arguably the highest-profile institution in the American culinary arts.

Problems came to the attention of trustees in early March, when the treasurer reported that 2002 tax returns had not been filed, says Sape. At the time, the trustees primarily acted as fund-raisers and did not exercise close fiscal oversight, he says.

An auditor determined that funds were being shifted between programs in a way that was not authorized by the board, Sape says.

There were "no findings of wrongdoing on the part of the paid staff of the foundation or the many outside volunteers who donate their time," says a press release issued last week.

Sape, the managing partner of the law firm Epstein Becker & Green, defends the foundation's big-ticket awards galas and the policy of making chefs pay for most of the Beard House dinners.

"One of the foundation's duties, and part of its mission statement, is to promote and advance the culinary arts in the U.S., and that requires putting on events," he says.

At the same time, he says "We probably should be putting more emphasis on education."

Sape replaces Leonard Pickell, who resigned as the foundation's unpaid president. Pickell defended his 17-year tenure as a volunteer, including the past eight years as president. Pickell says he retired the foundation's debt and "elevated the industry to the point where chefs are now seen as "superstars, as opposed to just servants, which is what they used to be."

Latest from the SFGATE homepage:

Click below for the top news from around the Bay Area and beyond. Sign up for our newsletters to be the first to learn about breaking news and more. Go to 'Sign In' and 'Manage Profile' at the top of the page.